Business | Economy
Gulf states 'must target' high inflation
Gulf governments have been urged to make inflation a core target of their monetary policy - a move that could bring into question the continued pegging of currencies to the dollar.
- Staff Report
- Published: 00:41 March 18, 2008
Dubai: Gulf governments have been urged to make inflation a core target of their monetary policy - a move that could bring into question the continued pegging of currencies to the dollar.
In spite of positive indications that Middle East markets are avoiding the effects of a global slowdown, "there is uncertainty in the markets that needs to be addressed," said Christian Mouchbahani, Middle East and North Africa CEO of investment bank and institutional securities firm Jefferies.
"Inflation needs to be tackled and it is not clear that channelling liquidity into real estate and stock markets will be enough," Mouchbahani said at the 3rd Middle East IPO Summit at the Intercontinental Hotel, Abu Dhabi.
By pegging their currencies to the dollar, most Gulf governments have, in effect, delegated monetary policy to the US Federal Reserve, Mouchbahani added.
More from Economy
More from Business
Business Editor's choice
-
‘Wrong Way' Krugman
The source of our economic malfunction lies with government-mandated bank regulations
-
Greek exit could make Eurozone stronger
Departure will show limits of bailouts and allow remaining members to act much more like a unit
-
UAE upholds values of free trade
Recently released statistics confirm an established fact, namely that of the UAE embracing the free trade principle in general and imports in particular
